Evaluating the Integration Subsidy

The integration subsidy – a targeted wage cost supplement offered by the Austrian public employment service AMS – aims to improve employment opportunities for the jobless, focusing on the older and long-term unemployed. This evaluation describes the use of a tool employed by Austrian labour market policy and evaluates its effect on the beneficiaries' further working life using microeconometric methods. In spite of substantial deadweight effects, the overall effect is positive. Its benefits are greatest for persons with major reintegration problems, especially long-term unemployed and older workers.